By Chris Dorrell
UBS expects to complete the acquisition of Credit Suisse as early as 12 June but reports suggest its next earnings statement will be delayed until the end of August.
In a regulatory filing today, UBS confirmed Credit Suisse will be delisted from the Swiss stock exchange when the deal is complete. It said Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares.
Credit Suisse’s debt obligations will also become obligations of UBS, the filing confirmed.
The Financial Times reported that UBS was considering delaying its second quarter results, scheduled for 25 July, until the end of August in order to provide a more detailed update on its plans for Credit Suisse’s domestic business.
Shares in UBS rose 1.1 per cent on Monday morning.
The deal, engineered by Swiss authorities in March to prevent a broader financial meltdown, is the largest banking merger since 2008. It will create a banking behemoth with over $5trn in assets, twice the size of Swiss GDP.
To secure the deal, Swiss authorities provided UBS with insurance in the form of an almost £8bn loss guarantee on a clearly defined part of Credit Suisse’s portfolio.
However, towards the end of May, UBS said it was still in negotiations with Swiss authorities over loss protections relating to the deal.
UBS estimates that it will take a $17bn hit from the takeover of Credit Suisse, resulting from a $13bn hit from fair value adjustments and $4bn in potential litigation and regulatory costs.
Many aspects of the deal have already been challenged by politicians and lawyers, including the controversial wipeout of Credit Suisse’s AT1 bonds.
Despite the complexities and costs associated with the deal, many analysts have pointed to the significant opportunities the deal poses for UBS, particularly in wealth management.
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